Swiss Repo and Spot Currency
Open-market operations are vitally important for any central bank because transactions determine not only funding costs but market size and liquidity levels. Success or failure of open-market operations connotes an economic expansion or contraction, up or down markets both long and short term that cover a wide range of financial instruments. The Swiss issue their final repo rate at the 6:00 p.m. close. This is the rate that will determine how the Swiss markets and the Swiss franc will react on their next day trading day, yet it sets a price for other overnight markets. It is the rate that sets the standard for swaps, forwards, fixed-rate instruments such as bond prices, yields, and yield curves. Yet the current rate ...
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